A Farewell to Alms

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Last Updated on May 8, 2015, by eNotes Editorial. Word Count: 1875

The title of Gregory Clark’s ambitious work of economic history, A Farewell to Alms: A Brief Economic History of the World , may be a little misleading for its potential readers. Those seeking a short chronological account of the world economy will not find it here. Instead, Clark’s goal is...

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The title of Gregory Clark’s ambitious work of economic history, A Farewell to Alms: A Brief Economic History of the World, may be a little misleading for its potential readers. Those seeking a short chronological account of the world economy will not find it here. Instead, Clark’s goal is to account for the transformation of economies that began about the year 1800 and to explain how this transformation resulted in contemporary inequalities in development among the nations of the world.

Before 1800, according to Clark, incomes and standards of living varied across historical periods, geographic locations, and social classes, but there was no general upward movement. Greater social differentiation may have made lives better for the rich and worse for the poor. Sometimes, a relatively more equal distribution of income may have led to better situations for the least advantaged. The average standard of living, though, remained the same from prehistory to the beginning of the modern era. Clark argues that the reason for this long economic stagnation was the Malthusian trap.

In 1798, Thomas Robert Malthus published a book on population in which he argued that human populations have a tendency to expand to the point at which their environments will no longer support them. When more food becomes available, the population will simply increase to consume the surplus. Under such a situation, there is no improvement of the overall economic situation because any expansion of the amount of food or other goods produced creates more people. When the population reaches the maximum that an environment will support, the population begins to decline again and cut back production. This account is basically a classical economist’s view of population, in which population obeys the laws of supply and demand. The account of Malthus was also an influence, some decades later, on the biological thinking of one of his relatives, Charles Darwin, who saw the supply of food in environments as shaping the characteristics, as well as the sizes, of living populations. The Darwin connection is also important to Clark’s book, because Clark suggests that population change, through a type of Darwinian selection, may have been the way out of the Malthusian trap.

In part 1 of the book, Clark provides an examination of life during the period of the Malthusian trap before 1800. Using an impressive amount and variety of historical statistical information, he sketches out an image of living standards, fertility, and life expectancy around the world during the long preindustrial stage of human life. One of his targets for accounting for the long economic standstill is the institutional argument. According to the institutional view, the modern market economies that create industrialization developed only after institutions such as stable governments and financial arrangements came into existence to make working, saving, and investing worthwhile. Clark offers evidence that European societies, most notably England, had all of the institutions considered necessary for a market economy by the year 1200. So why did it take so long for markets to spur investments and innovations?

Clark maintains that in the millennia following the creation of settled agrarian society with the Neolithic Revolution, humanity gradually changed its culture and its genetic composition in response to a new environment that required steady work at daily routines. This created habits of industriousness that Clark suggests may have been rooted in biology. The Industrial Revolution began in Europe, and more specifically in England, as a result of a social environment that promoted the spread of a particular kind of industriousness. Clark gives data that show that higher-income men in England on the eve of modernity had more children than lower-income men. Since wealth predicted reproductive success, the environment selected those with the disposition to accumulate wealth. Even as the relatively numerous children of successful men moved downward on the social scale, they carried this disposition with them into the lower social classes. As a result, more of the population at all levels became thrifty, hardworking, and prudent. Essentially, Clark maintains, modern human beings emerged when the traits often identified as bourgeois or middle class became common traits among large portions of the population.

With the emergence of these modern human beings, interest rates began to go down. It was not the availability of banks or political stability that lowered the preference for immediate enjoyment (which keeps interest rates high). Rather, it was the spread of personalities who were willing to delay gratification. These same middle-class personalities took the time to cultivate skills that would yield long-term benefits. Thus, literacy and numeracy increased rapidly in the years following 1800. Similarly, work hours grew longer as people aimed more at earning benefits and less at enjoying leisure.

Part 2 turns to the life after the escape from the Malthusian trap, to the Industrial Revolution and its results. Clark maintains, from statistical evidence on the historical growth of economic efficiency, that the economic benefits that began around 1800 came from production enhanced by knowledge. The problem, as he sees it, is why investments in expanding the useful stock of knowledge came when they did and why the advances came first in England.

Clark indicates that the underlying source of the Industrial Revolution, the improvement of the efficiency of labor, was actually slow and gradual. The change appeared to be sudden, though, because of population growth beginning about 1750, providing more of the workers who had been becoming more efficient. It did not happen in nations such as China or Japan, which also had trends of population growth, because the growth had not occurred with the suddenness found in England. Perhaps even more importantly, from the perspective of Clark’s argument, population growth in Asia was not as closely linked to wealth as it was in England. Thus, it was specifically in England that the economically successful had the greatest reproductive advantage, selecting for the middle-class traits that would drive economic development.

The events in England, and later in continental Europe and in America, had far-reaching social consequences. Clark offers data that contradict the Marxist view that early capitalism primarily benefited owners while creating an impoverished working class. Instead, according to Clark’s data, real hourly wages and standards of living of workers went up steadily from 1800 to the present, after centuries of remaining essentially the same. This presents a real break with the old Malthusian rule in human society, since levels of consumption grew greater as the number of people grew greater. In traditional economic terms, this is as if an increasing supply of a good (people) paradoxically led to a greater price for it, rather than a lower price. This seemingly contradictory trend occurred because each person became more valuable as productivity, the amount produced by each individual worker, increased.

While standards of living have improved at a remarkable rate in some parts of the world, though, they remain stagnant in others. The gap between rich and poor has not occurred within the advanced capitalist countries, but between those countries and the poorer parts of the world. Following his earlier line of thinking, Clark rejects the idea that this gap is a result of inadequate development of economic institutions or of exploitation of the poorer nations by the richer nations. He sees it as the consequence of a gap in worker efficiency between geographic and cultural areas. Relying mainly on textile and railway data from India, England, and the United States, he offers evidence that suggests the technological capacity and the management for high productivity were available in all three countries. India dropped behind because of the low efficiency of its workers.

Clark does not see prosperity as an unqualified boon, even for the rich nations. Using widely accepted current social scientific data, he suggests that general levels of happiness do not go up with rising standards of living. The rich are generally happier than the poor, but as people become richer the average level of contentment remains the same. Apparently, it is being better off than other people that produces satisfaction, not simply being better off. This is a particularly gloomy finding for the lower-income nations, as they enter a world economy in which they will be comparing themselves to the prosperous. In the end, a wealthier world may make no one more cheerful and many people more miserable.

Clark provides a fresh and stimulating account of the central event in human history: the break from the relatively static, agriculturally based societies that predominated in humankind’s adaptation to the environment for most of the period of civilization and the beginning of a society of high production and high consumption. He challenges many of the older explanations of this event. He gives good reasons to question whether it was chiefly the consequence of more productive technologies or of social institutions that stimulated investments in new areas and means of production. He effectively challenges old notions such as the progressive worsening of conditions of life for workers under classical capitalism. He leads readers to think in new ways about the continuing gap between the more developed and less developed nations of the contemporary world. Still, many readers may have questions about his own answers to the questions he so ably raises.

Ultimately, Clark’s speculation that the escape from the Malthusian trap was due to the Darwinian selection of productive characteristics in individuals never becomes more than speculation. His statistics on fertility and survival rates of higher-income people are consistent with his argument that traits of industriousness and high productivity spread downward through the population, but the statistics are insufficient to do more than establish the argument’s theoretical plausibility. Clark suggests that the spread of characteristics may be genetic or cultural, but there is no evidence that work habits or attitudes toward production are genetic in nature. Geneticists have not identified a productivity gene, and there is no basis for concluding that biologically based personality traits cluster according to social class. The downward spread of cultural characteristics is similarly troublesome. Why would the downwardly mobile children of successful parents pass on cultural characteristics to their own children, rather than see their own children assimilate to the dominant lower-class cultures in which they live?

In looking across nations, whether readers accept either a genetic or a cultural explanation, they face difficulties in accounting for the sudden rise of some nations and societies that were historically slow to develop modern economies. For example, why did Japan suddenly begin to create a highly efficient economy in the late nineteenth century? Why has China, virtually a symbol of economic backwardness until the middle of the twentieth century, begun to become one of the world’s most powerful economies in the early twenty-first century? Did the “little tigers” of Southeast Asia experience demographic change before their rapid advances in the 1980’s? Indeed, if the genetic version that Clark seems to prefer were true, then it is hard to see how the non-European nations that have become economically efficient and advanced recently could have done so with populations that did not experience the Darwinian pressures to produce middle-class genetic traits. Clark raises interesting questions about the rise of modern economies and he gives a provocative answer, but the support for the answer remains weak in spite of his wide erudition and ingenious use of data.

Bibliography

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Last Updated on May 8, 2015, by eNotes Editorial. Word Count: 34

Business Economics 42, no. 4 (October, 2007): 74-75.

The Economist 384 (August 18, 2007): 74-75.

Library Journal 132, no. 14 (September 1, 2007): 145.

The Nation 285, no. 18 (December 3, 2007): 28-32.

The New York Review of Books 54, no. 18 (November 22, 2007): 38-41.

The New York Times Book Review 157 (December 9, 2007): 21.

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